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Simplifying and modernising HMRC's Income Tax services

6 June, 2023

We have responded to the HMRC Consultation Simplifying and modernising HMRC's Income Tax services through the tax administration framework.

This Consultation represents the latest step in HMRC's project to modernise the tax system, which was first published as the Tax Administration Strategy. It focusses on three areas

  1. Digitalisation of some processes and certain HMRC correspondence 
  2. Improving the flow of data in the Pay As You Earn (PAYE) system
  3. Refining the Self-Assessment criteria and making them more understandable to taxpayers 

Our key points are:

  • The Consultation focusses more on reducing HMRC's administrative burden than it does on simplifying the income tax system, which is a missed opportunity.
  • The Consultation risks being too broad and superficial to achieve real insight in any one area.
  • The proposals may overestimate HMRC's ability to introduce robust digital services and support taxpayers in the transition to digital.
  • We question taxpayers' awareness of HMRC's expanding digital offering and their ability to engage with HMRC promptly when circumstances affecting their tax positions change. The role of agents in bridging these gaps is vital and has been emphasised in our response.
  • Faster flow of PAYE information will not necessarily result in more accurate tax collection; a degree of manual sense-checking will still be required.
  • The current Self-Assessment criteria and guidance are confusing, and we have made recommendations as to priorities for addressing these shortcomings. 

More details on the above points can be found in our full response.